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Hurricane Sandy Is Retail Boom Then Bust

10/29/2012

Generators, flashlights, water, batteries — these are just some of the emergency supplies that are running out in many stores in the Northeast.

The big chains are rushing trucks to replenish supplies as several states from North Carolina to Connecticut have declared emergencies before the hurricane makes landfall on Sunday and Monday causing power outages, flooding and mayhem.

Grocery store and general merchandisers like Target and Wal-Mart are seeing a burst of business from shoppers stocking up on supplies they need for the storm. Stores like Home Depot and Lowe’s got their share, too. Some shoppers also might be buying home goods, like candles and comforters and possibly some outerwear, cold weather accessories and other winter apparel.

While its likely no one is throwing a turkey platter or Christmas cards into their basket at this moment, retailers are hoping consumers are getting a good look at their holiday assortments.

That seems incredibly optimistic to me. If I’m pushing around a shopping cart in Walmart or Target looking for TP, batteries and canned goods, then hustling over to Home Depot or Lowes for a generator and some plywood…the last thing on my mind is what Martha Stewart’s holiday collection looks like.

Here are the hard, cold facts about a weather event like Sandy. It suppresses more business than in generates.

According to ValueWalk, Hurricane Sandy will negatively impact traffic and retail sales in the retail calendar’s November Week 1. Week one is historically approximately 22.4% of Novembers’s sales and traffic could be down approximately 40% for the week in negatively impacted areas. They calculate that Hurricane Sandy could negatively impact November monthly comps by 2-3% – causing a negative impact of 2-3% in November and yielding a negative quarterly impact of approximately 1-2%.

As you might imagine November is a critical month for retailers – of all types. While Hurricane Sandy’s impacts the Northeast and Mid Atlantic states – that is the home of over 22% of the US population. A hiccup in retail sales in that region will hurt retailers for certain.

Let’s hope that Hurricane Sandy is an over-hyped and over-sold non-event brought on by Doppler crazed meterologists looking for a burst of fame. Not just for the sake of retailers but for the regions’ residents as well.

Read how Sandy boosts online business and traffic at our post “Sandy No Online Bust

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